Is International Traffic a Blessing or a Curse?

This is really more of a blurb than a post. I have been talking to quite a few folks in the market today who have really fast growing web 2.0 or mobile applications where a significant portion of the traffic, pageviews, unique users, and usage comes from the developing world. In almost every case, the feedback that I have been hearing is that monetizing this user base is pretty tough — there aren’t a whole lot of advertisers looking to reach these folks and the CPMs (or whatever metric you choose to use) are too low to be interesting.

If you know something about this problem, have suggestions for how to address it, or just think I’m missing the boat, let me know — I have heard it from enough people to believe that it is in fact a real problem.

  • http://logxtech.com/bio.html Ken Berger

    one method that’s notable in some countries is to sell mobile minutes. Some countries sell the majority of their mobile services on a pre-pay model. If you have a website where people from that country congregate, have them top off or gift minutes via that site.

  • Ken Berger

    one method that’s notable in some countries is to sell mobile minutes. Some countries sell the majority of their mobile services on a pre-pay model. If you have a website where people from that country congregate, have them top off or gift minutes via that site.

  • Amitav

    I may be missing the point, but isn’t it a Marketing 101 issue (make an appealing product, then appeal to the appropriate audience)?

    I assume the marginal cost of servicing each user is quite low (at least for non-mobile apps). Do developing world users somehow crowd out higher revenue target users? (I understand that at some aggregate level of traffic there is a step change in the backend cost to serve, but on the margin, I would assume it’s pretty flat).
    Assuming marginal cost to serve is low and users don’t crowd each other out, isn’t this problem really about outreach to a target customer base? In other words, not so much about level of interest in the developing world (how to exclude them) so much as the lack of interest in the developed world (how to appeal to them).

    The flip side (assuming you have a developing world target audience or existing user base) is the CK Prahalad approach of making money on underserved market niches through volume (eg, Hindustan Lever customizing consumer products for rural India). Not sure how well that translates to web apps, unless they’re somehow local market specific.

  • Amitav

    I may be missing the point, but isn’t it a Marketing 101 issue (make an appealing product, then appeal to the appropriate audience)? I assume the marginal cost of servicing each user is quite low (at least for non-mobile apps). Do developing world users somehow crowd out higher revenue target users? (I understand that at some aggregate level of traffic there is a step change in the backend cost to serve, but on the margin, I would assume it’s pretty flat). Assuming marginal cost to serve is low and users don’t crowd each other out, isn’t this problem really about outreach to a target customer base? In other words, not so much about level of interest in the developing world (how to exclude them) so much as the lack of interest in the developed world (how to appeal to them). The flip side (assuming you have a developing world target audience or existing user base) is the CK Prahalad approach of making money on underserved market niches through volume (eg, Hindustan Lever customizing consumer products for rural India). Not sure how well that translates to web apps, unless they’re somehow local market specific.